[TYPE THE COMPANY NAME]
MAC3701 Assignment
2 (COMPLETE
GUIDELINE) Semester
1 2025 - DUE 16 April
2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
, QUESTION 1 (100 Marks; 180 Minutes) The Company information below
applies to Parts A, B, C, D, and E of assessment 02. The additional
information provided in each Part only applies to that part of assessment 02.
For each Part below, you must: • Clearly show all your calculations in detail
(marks are awarded for calculations); • Where necessary, indicate irrelevant
amounts/adjustments with an R0 (nil-value); • Round all your workings to
two decimals, except where otherwise stated, and • Ignore the time value of
money and all taxation implications. Company information Pedal Pump (Pty)
Ltd (PP) is a South African company that manufactures and sells both
Standard (SPump) and Booster (BPump) bike floor pumps. The company
prides itself on producing high-quality, durable products catering to urban
and professional cyclists. The company's manufacturing plant is based in
Benoni; they sell locally and export their products to various African and
European markets. The BPump has an added high-pressure aluminium air
chamber that quickly releases air to seat tubeless tyres on the tyre rim. The
manufacturing process primarily involves the melting and extrusion of
aluminium into the pump body and valve head tubing, while reinforced
rubber and rubberised composite are heated and injected into moulds to
create durable handles, hoses, and base plates. PP purchases other minor
components separately and adds them to the manufacturing process. The
company relies on dollar-denominated imports of high-quality aluminium and
rubber, which also have a high carbon footprint. The industry has low
barriers to entry, with stiff competition putting pressure on profit margins.
New South African manufacturing regulations require stricter quality control
and product safety testing, likely increasing operational costs. PP’s
management is considering using cheaper materials to reduce costs and
dependence on imported materials. After paying a generous facilitation fee,
the company obtained a
✅ QUESTION 1 – PART A: EVALUATION OF THE COST
ACCOUNTANT’S CALCULATION
Cost Accountant’s
Component Agree/Disagree Reason and Correct Workings
Value
Prime costs are 70% of selling
SPump: R1 500 price:
Prime Costs ❌ Disagree
BPump: R2 700 SPump: R2 500 × 70% = R1 750
BPump: R4 500 × 70% = R3 150
Per Note 1.4:
Manufacturing
R230 (both products) ✅ Agree Fixed: R150 + Variable: R80 =
Overheads
R230 per unit
Selling & Distribution Matches budgeted variable
R35 per unit ✅ Agree
(Variable) selling & distribution cost
MAC3701 Assignment
2 (COMPLETE
GUIDELINE) Semester
1 2025 - DUE 16 April
2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
, QUESTION 1 (100 Marks; 180 Minutes) The Company information below
applies to Parts A, B, C, D, and E of assessment 02. The additional
information provided in each Part only applies to that part of assessment 02.
For each Part below, you must: • Clearly show all your calculations in detail
(marks are awarded for calculations); • Where necessary, indicate irrelevant
amounts/adjustments with an R0 (nil-value); • Round all your workings to
two decimals, except where otherwise stated, and • Ignore the time value of
money and all taxation implications. Company information Pedal Pump (Pty)
Ltd (PP) is a South African company that manufactures and sells both
Standard (SPump) and Booster (BPump) bike floor pumps. The company
prides itself on producing high-quality, durable products catering to urban
and professional cyclists. The company's manufacturing plant is based in
Benoni; they sell locally and export their products to various African and
European markets. The BPump has an added high-pressure aluminium air
chamber that quickly releases air to seat tubeless tyres on the tyre rim. The
manufacturing process primarily involves the melting and extrusion of
aluminium into the pump body and valve head tubing, while reinforced
rubber and rubberised composite are heated and injected into moulds to
create durable handles, hoses, and base plates. PP purchases other minor
components separately and adds them to the manufacturing process. The
company relies on dollar-denominated imports of high-quality aluminium and
rubber, which also have a high carbon footprint. The industry has low
barriers to entry, with stiff competition putting pressure on profit margins.
New South African manufacturing regulations require stricter quality control
and product safety testing, likely increasing operational costs. PP’s
management is considering using cheaper materials to reduce costs and
dependence on imported materials. After paying a generous facilitation fee,
the company obtained a
✅ QUESTION 1 – PART A: EVALUATION OF THE COST
ACCOUNTANT’S CALCULATION
Cost Accountant’s
Component Agree/Disagree Reason and Correct Workings
Value
Prime costs are 70% of selling
SPump: R1 500 price:
Prime Costs ❌ Disagree
BPump: R2 700 SPump: R2 500 × 70% = R1 750
BPump: R4 500 × 70% = R3 150
Per Note 1.4:
Manufacturing
R230 (both products) ✅ Agree Fixed: R150 + Variable: R80 =
Overheads
R230 per unit
Selling & Distribution Matches budgeted variable
R35 per unit ✅ Agree
(Variable) selling & distribution cost
